Sign up today for an exclusive discount along with our 30-day GUARANTEE — Love us or leave, with your money back! Click here to become a part of our growing community and learn how to stop gambling with your investments. We will teach you to BE THE HOUSE — Not the Gambler!

Click here to see some testimonials from our members!

Crypto Crashes As SEC/OCC Warn Of ‘Reckoning’, Question “Long-Term Viability” Of Private Forms Of Money

Courtesy of ZeroHedge View original post here.

Crypto was hit by a double whammy from The SEC and OCC today…

Like a wolf in sheep’s clothing, SEC chief Gary Gensler led many crypto industry types to believe that he would be “a friend” to the nascent industry, largely because he once taught a class on the subject at MIT.

Instead, using the logic that extensive regulation is necessary to spur “widespread adoption” (note: there are more Coinbase accounts than Charles Schwab accounts now), Gansler has insisted that all exchanges be registered with, and regulated by, his agency, or “a lot of people are going to get hurt”.

Speaking during a live interview Tuesday with the Washington Post, Gensler made another comment that was immediately twisted by headline writers in a way that sent prices of bitcoin and Ethereum sliding once again. Gensler said he doesn’t see “long-term viability” for most crypto.

“I don’t think there’s long-term viability for five or six thousand private forms of money,” Gensler said in a virtual event hosted by the Washington Post.

“So in the meantime I think it’s worthwhile to have an investor-protection regime placed around this.”

Speaking to WaPo’s David Ignatius, Gensler doubled down on his “Wild West” analogy for cryptocurrencies like stablecoins, which he compared to gambling chips.

“Stablecoins are almost acting like poker chips at the casino right now,” said Gensler.

“We’ve got a lot of casinos here in the Wild West, and the poker chip is these stablecoins at the casino gaming tables.”

While we are not exactly shocked that ‘the establishment’ should question “private forms of money” – that are not under their total control – the fact that Gary Gensler was heralded as ‘educated and friendly’ towards crypto is clearly wrong now that political pressure from Yellen et al. is in play.

It wasn’t just Gensler though, as Michael Hsu, the acting chief of the Office of the Comptroller of the Currency, argued Tuesday that cryptocurrencies and decentralized finance may be evolving into threats to the financial system in much the same way certain derivatives brought it near collapse more than a decade ago.

“Crypto/DeFi today is on a path that looks similar to CDS in the early 2000’s,” Hsu told the Blockchain Association in a webcast.

“Fortunately, this group has the power to change paths and avoid a crisis.”

As Bloomberg reports, OCC had previously been run by a former Coinbase executive, Brian P. Brooks, who led a pro-crypto charge to establish policies more welcoming to the industry and to provide some of the firms banking charters. When he was installed at the OCC by Treasury Secretary Janet Yellen, Hsu put its crypto-friendly policies on hold and has been among regulators calling for a new, unified approach across agencies.

Hsu went even further in his broad denigration of the crypto world:

“Crypto/DeFi solutions to problems in the real economy are rare,” Hsu said, adding that a reckoning could be on the way in which the “hardcore believers in the technology” give way to mainstream users who aren’t as eager to forgive the riskiness of the products.

Those people will “dominate and drive reactions,” which he suggested could mean more danger of panics that unravel crypto investments and threaten firms that run into trouble.

As all this regulatory pressure hit, Coindesk reported that Coinbase is said to be working on a pitch to federal regulators on how to oversee the crypto industry.

Having gone on an anti-SEC tirade over their ‘Lend’ program – only to quickly fold on the entire product – we wish CEO Brian Armstrong luck as the exchange plans to publicly roll out this proposal in the coming days, according to sources familiar with the regulatory discussions.

Details of the proposal were not available at press time, but among other matters the company intends to argue what should and should not be defined as a security within the US.

With all this hitting, it’s no surprise FUD has driven cryptos lower with Bitcoin and Ethereum testing down towards their 100-day moving-averages…

But, on a more hopeful note, CoinTelegraph notes that the Crypto Fear & Greed Index indicates that the cryptocurrency market is experiencing a period of investor fear with a three-month low score of 27 out of 100 – a shift towards extreme fear signals BTC may be undervalued.

Reddit user u/_DEDSEC_ adapted the common trading mantra ‘buy the rumour, sell the news’ and commented that traders should “buy the fear, sell the greed.”

Arguably, it would seem Ray Dalio’s view of the end of crypto – crushed before it can become too successful – is the gameplan of the establishment for now.

Well I think regulation, I think at the end of the day if it’s really successful, they’ll kill it. And they’ll try to kill it and I think they will kill it because they have ways of killing it but that doesn’t mean it doesn’t have, you know, a place, a value and so on,” Dalio said.

Can a decentralized platform defeat the hegemon?


Do you know someone who would benefit from this information? We can send your friend a strictly confidential, one-time email telling them about this information. Your privacy and your friend's privacy is your business... no spam! Click here and tell a friend!





You must be logged in to make a comment.
You can sign up for a membership or get a FREE Daily News membership or log in

Sign up today for an exclusive discount along with our 30-day GUARANTEE — Love us or leave, with your money back! Click here to become a part of our growing community and learn how to stop gambling with your investments. We will teach you to BE THE HOUSE — Not the Gambler!

Click here to see some testimonials from our members!